March 2008 Interview with: Santa Fe Gold Corp. (SFEG-OTC: BB) president and CEO Dr. W. Pierce Carson, Ph.D. - featuring: their Summit silver-gold property and a mill site and processing equipment in southwestern New Mexico; mineral lease rights to the Ortiz gold property in north-central New Mexico, believed to contain two million ounces of gold; the Black Canyon mica mine and processing facility near Phoenix, Arizona.

Santa Fe Gold Corp. (SFEG-OTC: BB)

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Santa Fe Gold Is In A Period Of Transition From The Exploration Phase To Development And Production With Two Gold And Silver Projects In New Mexico

Precious Metals

Santa Fe Gold Corp.

1128 Pennsylvania NE, Suite 200
Albuquerque, NM 87110
Phone: 505-255-4852

Dr. W. Pierce Carson, Ph.D.
President and CEO

Interview conducted by:
Lynn Fosse, Senior Editor
Published – March 21, 2008

W. Pierce Carson, President & CEO, Director

W. Pierce Carson, PhD joined Santa Fe Gold Corp as President and CEO in the fall of 2003 as part of the Company’s restructuring and reorganization initiative, following a period of engagement as consultant. With Santa Fe Gold, Dr. Carson continues an accomplished international mining career spanning 35 years with extensive experience in directing exploration, development and mining of base metals, precious metals and industrial minerals and in administering public companies. He served with distinction in a variety of roles at Exxon Minerals, Kennecott Copper and Nord Pacific Ltd.  Dr. Carson holds a PhD in Economic and Structural Geology and an MS in Ore Deposits from Stanford University, and a Bachelors Degree in Geology from Princeton University.

Company Profile:
Santa Fe Gold Corp (OTCBB: SFEG) is a U.S.-based mining and exploration enterprise focused on acquiring and developing gold, silver, copper and industrial mineral properties. The company owns the Summit silver-gold property and a mill site and processing equipment in southwestern New Mexico; mineral lease rights to the Ortiz gold property in north-central New Mexico, believed to contain two million ounces of gold; the Black Canyon mica mine and processing facility near Phoenix, Arizona; and a large resource of micaceous iron oxide (MIO) in western Arizona. Santa Fe Gold intends to build a portfolio of high-quality, diversified mineral assets with an emphasis on precious metals.

Dr. Carson, what is the vision for Santa Fe Gold?
Dr. Carson: “Santa Fe Gold is a mining exploration company focused on precious metals and is in a period of transition from the exploration phase to the development and production phase. We have two high quality precious metals projects here in New Mexico and we are proceeding to take one of those into production. We plan to use cash flow from operations to help develop our second, larger mine, and to make additional acquisitions. Starting with these precious metals projects, our vision is to build a much larger company, based on cash flow from producing mines and with a portfolio of development and exploration properties in the pipeline. The current investment climate in relation to the precious metals markets provides a favorable setting in which to accomplish our goals and to create value for our shareholders.”

CEOCFO: Where are you in the development process?
Dr. Carson: “Late last year we completed financing for our Summit Project, which will be a new silver/gold mine located in southwestern New Mexico. In January of this year we hired a very experienced project manager and began construction activities. We have initiated ground clearing and preparation of the Summit mine and Lordsburg mill sites, and we will be transporting the milling equipment to the mill site for installation. We already have purchased a significant portion of the equipment that we will need. We also are arranging for water and power at the mill site. At the Summit mine, we are obtaining quotations from mining contractors for mining the ore. Our preference is to employ a contractor to mine the ore and employ our own people to process the ore. It is still early in the construction phase and we have a lot of work to do this year. Barring unexpected delays, we expect to achieve initial production later in the year.”

CEOCFO: Given all the activity in the mining industry, is it difficult to get the personnel and the contractors and the equipment that you need?
Dr. Carson: “They are in short supply. We have been fortunate in obtaining a first rate and very experienced project manager who is familiar with operations in southwestern New Mexico. So far, we have been able to obtain the people and contractors we need. But generally what you are saying is correct. There is a shortage of people in the mining business. It is boom times right now and whenever that happens there always is a shortage of people. Our mine is a relatively small mine in terms of the number of people and size of the operation, although it is projected to have very good operating margins. We are not out looking for hundreds of people, but rather will be hiring only two or three dozen so don’t anticipate a big problem.”

CEOCFO: Is New Mexico friendly towards the mining industry?
Dr. Carson: “Yes, generally it is. The southwestern part of the state where we are establishing our first mine, the Summit Mine, is active mining country. Phelps Dodge, which is a large copper producing company, operates several copper mines in southwestern New Mexico and southeastern Arizona. There are a number of historic mining districts in the region that have been significant base metals and precious metals producers. Generally people in the Silver City and surrounding areas look favorably upon mining. Mining provides jobs and is important to the local economy, and also is part of the region’s heritage.”

CEOCFO: Please tell us about the property and the potential?
Dr. Carson: “The Summit resource has attractive grades in silver and gold. We plan to mine the ore by underground methods and truck the ore to the Lordsburg mill for processing. Economics of the project are sensitive to silver and gold prices, but at the current prices, we expect the project to have excellent operating margins and produce substantial cash flows. The resource is sufficient for an initial seven to ten years of mining. So we have enough there to get established and to operate for many years. We also are acquiring additional land and think there is good upside exploration potential in the Summit area. Also, once we establish the  mill in Lordsburg, we expect to be able to bring in additional ore from other districts that would be within trucking distance of the mill. As far as we know, Santa Fe Gold will be the only company in the area to have a milling operation of this type, which we believe will generate a lot of opportunities.”

CEOCFO: Are there new technologies that you are able to take advantage of in the mining process?
Dr. Carson: “Yes, both the mining and the processing will use modern, state of the art “best practice” techniques to enhance safety and minimize environmental effects. Other than that, the methods we will be using for both mining and processing are well know and proven and do not involve significant technical risk. On the exploration side, we will be using some sophisticated advanced techniques, both geophysical and geochemical.”

CEOCFO: Please tell us about the Ortiz gold project.
Dr. Carson: “The Ortiz project is in the north central part of New Mexico about 30 miles northeast of Albuquerque. We have a very large property position there, covering almost 90 square miles. Historically the Ortiz property has had a lot of work done on it. Back in the 1980’s and early 1990’s, there was about $40 million expended including 380,000 feet of drilling. That work identified very significant gold resources totaling about two million ounces.  We have carried out open pit designs on a portion of those resources and concluded that mine development would be economically attractive and that the mine would be capable of producing gold at a relatively low operating cost per ounce. We intend to develop the Ortiz mine following development of our Summit mine, the timing partly dependent upon the permitting process. The Ortiz property is a very significant asset for a company of our size. In addition to substantial cash flows from mining, the large area under our control has the advantage of promising exploration potential for additional significant discoveries.”

CEOCFO: You have many years expertise in mining, why do you like the area you are in, why have you chosen it to work in?
Dr. Carson: “There are a number of answers to that question. First, we feel that New Mexico is under explored compared to some of the other states such as Nevada which produces a lot of gold. Projects in New Mexico also happen to be in our backyard, so we are able more easily to handle the management and logistics as compared, for example, to going down to South America. We may want to go further afield as we grow as a company but at least to start with, focusing on projects close to home is an expedient way for us to quickly achieve production, generate cash flow and use that to build a base upon which to expand.”

CEOCFO: There are many companies in the mining sector, why should investors look at Santa Fe Gold, what sets you apart?Dr. Carson: “Santa Fe Gold has several attributes to offer investors. First, the quality of our management. We are a small group but very experienced and have “done it before”, in fact many times, by successfully taking projects all the way from exploration through development and operation. Secondly, the quality of our projects. Both the Summit and Ortiz projects have significant established resources and both are estimated to be in the lowest quartile of operating costs worldwide for gold production. And thirdly, our business model. We are on track to achieve production in the near term, which is unusual for a junior exploration company. Of course, exploration and additional acquisitions also are an important part of our future, but we believe becoming a real operating company with cash flow will set us apart and help lead to long term success. As we move closer to production and continue to accomplish our goals, we believe the market will give us greater recognition, to the benefit of our shareholders.”

CEOCFO: Final thoughts, what should people remember about Santa Fe Gold?
Dr. Carson: “Santa Fe Gold has quality management, quality precious metals projects and near-term production. These are the ingredients for success and will drive appreciation in the company’s market value.”


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“Santa Fe Gold has quality management, quality precious metals projects and near-term production. These are the ingredients for success and will drive appreciation in the company’s market value.” - Dr. W. Pierce Carson, Ph.D. does not purchase or make
recommendation on stocks based on the interviews published.